The Electoral Finance Act and the recent debate about political finance in New Zealand has brought attention to the links that political parties are said to have to a number of ‘third parties’. This post looks in extensive detail at the Labour Party’s various societal third party linkages over its history. It shows that the Labour Party's organic links to civil society have eroded, and its legendary relationship with trade unions barely exists anymore in any meaningful sense [Read more below]
The Labour Party has always had numerous formal and informal alignments with societal organisations, although the strength of all of these relationships has fluctuated over the years. Most obviously, Labour has had a very close relationship with the trade union movement, which has provided one of the party’s strongest connections with civil society. In fact the party started life in 1916 as the political wing of the union movement, with an affiliate membership. It was only later that Labour allowed people to join the party through branches. After the party came to government and introduced compulsory unionism in the 1930s, Labour had 185,000 union members – a membership level that they managed to retain until the 1990s (Gustafson, 1992b: p.274).
Until the 1970s the unions played a key role in party affairs. The affiliation relationship was important, as it gave the party a direct link ‘to trade union leaders, their problems, worries, anxieties, and their money’ (Ovenden, 1986: p.30). The affiliated unions were able to exercise considerable power at party conferences, due to their strong voting power based on their large paper memberships. For example, at the 1967 conference, ‘affiliated unions exercised 56% of the vote – their 376 votes compared with 201 votes for branches, 43 for LRCs and 7 for the Maori Policy Committees’ (Strachan, 1982: p.17). Likewise, in 1972 ‘48 unionists had 393 card votes; the other delegates had 368’ (Jesson, 1974: p.1). However, rather than using such power for radical ends – as is commonly presumed – normally the union votes were used to support the party leadership against party radicals (James, 1987a: pp.31-32). The affiliation of trade unions to the Labour Party was never really a genuine link with working people, but primarily united top union officials and party leaders. Thus, although the party once claimed to have about 200,000 affiliated members, this was not a ‘real membership’. For example, in 1979 Levine wrote that ‘While the unions are affiliated with the Labour Party, it is clear that few union members are enrolled, subscribed, participating members of the Labour Party’ (Levine, 1979: p.72). Likewise, Gustafson has written that ‘only a very small minority of unionists have actively involved themselves in the party’s affairs, usually through their concurrent membership of a local branch of the party’ (Gustafson, 1989: p.209). Even in the 1950s Gwendolen Carter wrote that although the relationship between Labour prime ministers and the national executive of the Federation of Labour was normally very close, it obviously involved very few people (Carter, 1956: p.95).
One of the more formal mechanisms for the relationship between Labour and the unions used to be through the (now-defunct) Joint Council of Labour – a communications forum involving the party and union leaders that met after each party conference to make recommendations to the parliamentary Labour Party. Informal channels were also solid and significant. Leslie Lipson, writing in the 1940s described the inter-relatedness of Labour and the trade union movement:
there is a strong tie-up between the personnel of the trade union leadership and the parliamentarians. Leading positions within the party, including the chairmanship, are held by prominent trade-unionists. Many of the Labor ministers have been active in their past careers as union secretaries. The executives of the party and the unions hold joint meetings from time to time, and, since the Labor government has been in power, these meetings have been reinforced by the presence of the cabinet. The annual conference of the Federation of Labor [FOL] is held a few weeks before that of the Labor party, and some of the delegates are the same on both occasions. In practice there has been a much closer working relationship between the Labor cabinet and the executive of the Federation than between the cabinet and the party organization outside Parliament (Lipson, 1948: p.248).
The relationship in the 1950s between Labour and the union leadership was also described by Carter as being very close: ‘The closest relationship is maintained between the [Labour] prime minister, [and] the national executive of the Federation of Labor’ (Carter, 1956: p.95). Robert Milne wrote in the 1960s that ‘The links of the unions with the Labour Party are numerous and hard to disentangle’ (Milne, 1966: p.105). Cleveland argued in the 1970s that the ‘Labour Party is powerfully influenced by its connection with the trade union movement’ and that ‘party leaders are continually at pains to show that they are on good terms with FOL leadership, particularly at election time’ (Cleveland, 1977: p.115; p.134). Such could not be said today. For some time, Labour Party leaders have been determined to give the impression that they are not under the sway of the trade unions. Cleveland said that there existed ‘a degree of common purpose linking the two organisations which is both a source of strength, and at times, of embarrassment to them, particularly during bouts of industrial conflict’ (Cleveland, 1977: p.115). Furthermore, the interaction between Labour and the union movement used to be such that, according to Vowles, ‘The FOL used to regularly express public support for Labour and urge trade unionists to vote accordingly. The strength and substance of that support increased markedly in the period prior to the 1984 election, but has declined since’ (Vowles, 1992a: p.352).
The power of unions within the party was enhanced by the number of valuable resources they could provide for the party. Union leaders could ensure the election campaign occurred without embarrassing strikes, election meetings could be organised in the workplaces, and unionists could be supplied for canvassing in marginal electorates (Gustafson, 1989: p.215). Perhaps most importantly, at a time when the Labour Party derived little in the way of donations from business interests, the union’s financing was the lifeblood of the party. In the 1940s, for example, union contributions were ‘the largest, the most regular, and the most dependable item in the party revenues’ (Lipson, 1948: p.248). As a result of their financial contributions ‘as well as through their numerical majority’ Lipson observed, ‘the unions inevitably preponderate in all decisions on Labor strategy and policies’ (ibid). This influence did not last, however, and by the 1980s the party derived only a tiny proportion of its election campaign fund from the unions. By the 1990s donations from wealthy individuals and businesses heavily outweighed any union contributions.
The peak of union affiliation occurred about 1979, when there were ‘fourteen national trade unions and sixty-nine provincial (district) trade unions’ affiliated with the Labour Party, providing the party with 200,000 affiliated members (Levine, 1979: p.72). [See also: Vowles (2002b: p.419), who provides further details: ‘In 1982 45 unions were affiliated to the party. They represented between them approximately 30 per cent of union members, 37 per cent of private sector unionists and 12 per cent of public sector unionists’.] By the early-1990s the numbers of affiliated unions and unionists had declined substantially, and in 1994 only 51,000 unionists and seven unions remained affiliated (Munro, 1994b: p.2). Since then the number of affiliated unions has dropped to only five and no current figures are available on the affiliated numbers of workers, although they have almost certainly declined even further. The only affiliated unions of any real strength are the Engineers and the Service Workers Unions. Furthermore there is no central trade union body that is affiliated to the Labour Party. The Council of Trade Unions, which represents 83 percent of union members and 36 percent of wage and salary earners, has no party affiliations (Vowles, 1992a: p.346).
It is obvious that neither the union movement nor party leadership actually attempted to incorporate the affiliate membership into any real involvement in the party. In fact it can be argued that the union members – as distinct from the union leadership – have played almost no effective role in the party since the 1960s – despite the fact that they continued for some time after this to materially sustain the party. There was certainly never any deep political participation in the Labour Party by rank-and-file union members. In the 1970s Webber reported that even ‘In the Auckland Boilermakers’ Union, the most policy-orientated of all the party’s affiliated unions, only about twelve of 600 members in Auckland City were active in the Labour Party in 1975. In other unions, therefore, the ratio of active to affiliated members is probably lower’ (Webber, 1978: p.195). Part of the explanation for the question of why the union movement has had such little influence on its party lies in the essentially weak and flabby state of the union movement due to the existence of compulsory unionism in New Zealand since 1936. As Brown maintains: ‘affiliated union membership may have swelled the party’s membership lists and coffers, but it was essentially a dues-paying cardboard empire rather than a real measure of active strength’ (Brown, 1962: p.216).
The formal relationship between the party and the union movement has been in decline for a long time. Douglas Webber argues that the Labour Party ceased to have any real organic link with the trade union movement in the 1970s:
By 1975, Labour had ceased to be either a mass party or a party of the working class, organised or otherwise. Having relinquished or been dispossessed of the power that they had once exercised in the party, trade unions ceased (as of 1975) to be active participants in Labour’s internal politics (Webber, 1978: p.191).
As an example, the Joint Council of Labour ‘met on twenty-two occasions between 1952 and 1957 – but only twice between 1970 and 1975’ (Webber, 1978: p.189).
Certainly over the last three decades there has been a conscious movement by Labour Party leaders to limit the influence and role played by the union movement within the party. This started in full during the party’s 1967 annual conference when Jim Anderton, Roger Douglas and Michael Bassett attempted to introduce the ‘red book’ reforms, which would have reduced the voting power of unions. They failed, but subsequent conferences between 1975 and 1984 adopted many of the proposed reforms. In particular, this reform momentum continued throughout the 1970s, with the abolition of the multiple electorate Labour Regional Committees (LRCs) which amounted to a considerable blow to the affiliated unions because the LRCs had for sixty years been a significant mechanism for trade union influence. According to David Strachan, their abolition ‘was seen as further separation of the Party from its trade union base and its working class traditions’ (Strachan, 1982: p.27). In the early 1980s the trade union affiliates agreed to a constitutional change that meant their voting power would be reduced further (Sheppard, 1999: p.138). Labour leader Bill Rowling was particularly keen to weaken the union-party links, and at the 1982 party conference he ‘encouraged delegates to improve their chances of winning elections by breaking away from the unions’ (Maharey, 1987: p.73). Again in the mid-to-late 1980s, the power of the affiliated unions was a contentious issue – especially for the newly formed internal-party Backbone Club (dealt with later), which feared the unions would endanger the economic reforms being carried out by the government. The Backbone Club therefore sought to ‘democratise’ the party, by stripping the affiliated unions of their conference bloc vote.
That the Labour Party became less dependent on and influenced by the trade union movement meant that it could more easily implement its neo-liberal reforms, with less regard for the interests of unionised workers (McRobie (1992: p.402). The history of the Fourth Labour Government in office was instructive as to the orientation of the party towards its union supporters. For it could not be said that Labour in government was sympathetic or willing to act in favour of the interests of labour. If anything, Labour Party ministers went out of their way to prove that they were not union-friendly. As Labour Party president, Margaret Wilson stated: ‘the minister of labour, Stan Rodger; the minister of finance, Roger Douglas; and the associate minister of finance; Richard Prebble, who had special responsibility for industrial relations, were determined from the outset not to be seen to have been "captured" by the trade union movement’ (Wilson, 1989: p.95).
Although the Labour Government was reluctant to confront labour in a real war, this did not stop it undertaking serious measures to reform the labour market. As Colin James points out, the Government did not ‘deliver a managed wage round when the union movement was on the defensive in 1986 and it did introduce an element of flexibility and contestability into the labour market and in union coverage in its rewrite of the wage-fixing and industrial relations legislation passed in 1987’ (James, 1987a: p.21). John Edmundson has outlined some of the Fourth Labour Government’s other anti-union initiatives:
The Labour Relations Act abolished all unions with membership below one thousand. The Act also instituted the principle of competition for membership between unions. Labour also brought in new restrictions on the right to strike and gave employers the right to sue unions and workers involved in ‘illegal’ strikes. Government took for itself the express right to force strikers in ‘essential’ industries back to work (Edmundson, 1999: p.11).
All of these actions amounted to a partial deregulation of the market and undoubtedly reduced the strength of unions and the ability of unionised labour to improve their remuneration – particularly due to the removal of state-enforced arbitration. [See: James, who points out that ‘Partial deregulation of the labour market, particularly the removal of state-enforced arbitration in 1987, reduced the influence of unions over wage and salary levels’ (James, 1993: pp.21-22).] Edmundson concludes that ‘Labour’s policies attempted to avoid the outright antagonism of the labour movement while at the same time moving clearly and inexorably towards a "free" labour market’ (Edmundson, 1999: p.11).
Clearly the Labour Party when in government during the 1980s was not a particularly union-friendly regime – although its rudimentary relationship with the labour movement did force it to make some concessions. Towards the end of the Fourth Labour Government, for example, the union movement was able to claim some influence upon the Government when the Council of Trade Unions (CTU) negotiated a ‘growth agreement’ with the Mike Moore administration. It is significant that this did not occur earlier – as in Australia – which was, according to the then party president, Margaret Wilson, largely due to the ‘lack of personal rapport between the leadership of the Federation of Labour and the parliamentary Labour Party’ (Wilson, 1989: p.99). Wilson also says the compact failed because it ‘was not consistent with the government’s economic policy of non-intervention’ (Wilson, 1989: p.99). For other explanations on the failure of ‘the compact’ in New Zealand, see: Harvey (1992).
As a reaction to their loss of influence, in the late 1980s the affiliated unions attempted to assert their power in the selection of election candidates. Having failed at the policy level, the unions were seeking to exploit other avenues of influence:
The Labour Party’s constitution does allow unions to dominate the selection/election process if they choose to ‘abuse’ their position. In the past a ‘gentleman’s agreement’ has dampened down the wilder excesses, but some unions have taken the view that because the Government has ‘reneged’ on traditional Labour Party principles they should use every tool at their disposal to fight back (Simon Walker quoted in Sheppard, 1999: p.25).
This assault was particularly effective in the 1987 and 1990 elections in securing the candidacy and election of some union-friendly MPs. However by the early 1990s the trade union movement was playing a minimal role in the Labour Party and this started to be reflected in ‘a series of embarrassing setbacks for candidates of the Left’ (Sheppard, Jan 1998a: p.215). This decline was also related to changes to the party constitution in 1991 that diluted the unions’ power concerning candidate selection. In other areas, the strength of affiliated unions had also visibly declined. For example, in 1991, the ‘unions made up only 68 of the 402 delegates at the [party] conference, and held 272 of the 628 votes’ (Collins, 1991). At the 1993 election year congress, the unions held only 105 of 387 card votes, while in ‘comparison, party branches, electorate committees and MPs held 250 between them’ (Munro, 1993a: p.2). By 2000 the five affiliated unions controlled only 56 votes out of 536 (Small, 2000a).
The union movement’s declining influence in the Labour Party is also reflective of the declining size and political significance of unions in general. As pointed out in Chapter Four, the rate of unionisation has halved between 1985 and 2002. Despite the rhetoric about the close connection between workers’ organisations and the Labour Party, the simple reality is that Labour’s structured ties with working people have been largely severed. In this, the case of the New Zealand Labour Party is little different from that of other social democratic parties around the world where there has been a trend to distance themselves from organised labour. Although there are still some formal and official links between the Labour Party and the union movement these are essentially elite links rather than anything more organic. Although some informal links of personnel also exist, these are often exaggerated in the media and by Labour’s opponents. Organisationally, the link between the two no longer exists in any substantive form. Although the affiliated trade unions have continued to have representation on the New Zealand Council of the Labour Party, it would now be odd or mischievous to suggest that union leaders have any great influence within the formal or informal structures of the party. Power within the party has significantly shifted, and it now rests almost solely with Labour’s parliamentary leaders. One example of the CTU’s lack of influence within Labour was immediately after the 2002 general election when the president of the CTU, Ross Wilson, called for a continued Labour accommodation with the Green Party instead of United Future. Helen Clark rebuffed him and then accepted the formal support to govern from the more conservative United Future.
The fact that trade union political strength has noticeably declined, is illustrated by the fact that while few New Zealanders would be able to name the president of the CTU’s as Ross Wilson, the president of the defunct FOL used to be a household name. Jackson has pointed out that during the period that Labour was in opposition during the early 1970s, ‘at times the role of the leader of the federation was virtually that of an alternative leader of the opposition’ (Jackson, 1973: p.93).
The gap left by unions has partly been filled by other interest groups. Even as early as 1978, Webber noted that ‘In the trade unions’ absence, other social groups have converged upon the Labour Party and turned it into their political vehicle’ (Webber, 1978: p.189). If by the 1970s the Labour Party organisation had withered to that of an empty shell, in the immediate post-1975 period Labour reconnected itself with many organised social forces. Of particular note, the party organisation became strongly connected with the new social movements growing around anti-racism, gender issues, the environment and peace. These movements translated into recruits for Labour, helping the party become dominated by a middle class membership (Gustafson (1989: p.210). By 1984 this connection with the new social movements was yielding valuable resources for Labour’s election campaign. For example, the party’s 1984 general election campaign was greatly bolstered by enthusiastic campaign workers from the peace movement, and many of the party’s new MPs, such as Helen Clark, had been recruited from that movement and other social liberal causes (Jesson, 1989a: p.49). Jesson provides an example of how many of these groups crossed over and were also part of the trade union movement: ‘The organisation Feminist Teachers became particularly powerful in education, where there is a considerable overlap between the unions, the bureaucracy (with many officials having a teachers’ association background) and the Labour Party (which had large numbers of teachers among its members). Maryann Street illustrates the point, having been a member of Feminist Teachers, an official of the Post Primary Teachers’ Association, a vice-president of the Labour Party, and a friend of the 1984-87 Minister of Education, Russell Marshall’ (Jesson, 1992c: p.370).
Related to Labour’s general eroding links, Steve Maharey pointed out in 1987 that there was an absence of civil society figures and institutions that might otherwise bolster the party’s operation in parliamentary politics:
On the other side of the political fence there is very little. No national paper taking a Left line. There are few national spokespersons, like Margaret Wilson, to continue to link the Left with welfarism and intervention as if these goals are the end of point of radical aspiration. No theoretical journal with mass circulation. No distinct grouping of intellectuals who can agree on what being Left means now that Keynesianism (which was never Left anyway) has gone. No organisation which can put itself forward as the basis for a Left coalition (Maharey, 1987: p.81).
One might have expected the Fourth Labour Government to have established or formed links with a number of supportive institutions through their massive reorganisation of the state sector, but this never occurred. It was reflective of Labour’s lack of institutional relationships, for example, that when appointing personnel to the new institutions (various boards, committees, and state-owned enterprises), the Labour Government ‘had to reach out into National party territory’ for its appointments (James, 1987a: p.33). Whilst in government the party also failed to establish new institutions – like think tanks – that would be supportive of the new regime. Instead, they relied on PR firms to try to link the party with the public and on business interests for support. Most significantly, the Business Roundtable became highly influential on the Labour Government. As the Fourth Labour Government implemented the policies favoured by business, Labour became the preferred party of the wealthy. In government it worked closely with, and was highly influenced by, key businessmen Roger Kerr, Alan Gibbs, Ron Trotter, Rod Deane, and John Fernyhough. After Labour returned to power in 1999, business organisations again became supportive. Vice-chairman of the Business Roundtable and former ‘Entrepreneur of the Year’, Bill Day, also became a champion of the Labour Party (Talbot, 3 Jul 2002). Even chambers of commerce became more supportive. For instance, following the 2002 election, the Wellington Chamber of Commerce was welcoming of Labour’s re-election. Business organisations generally credit the Labour Party as being economically orthodox and credible. However, since returning to power in 1999 the Labour Party has had little to do with the Business Roundtable, regarding it as increasingly irrelevant and lacking credibility. Instead the Clark-Labour Government has dealt with organisations that are more in line with Third Way ideology, such as the Business Council for Sustainable Development and Businesses for Social Responsibility. Nevertheless these organisations are probably just as likely to work with any other party in government. Labour’s post-1999 orientation to the Business Roundtable reflected the decline in credibility of that organisation. See: Rotherham (2000). By contrast, while in opposition, Labour’s finance spokesperson, Michael Cullen, accepted a trip from the Business Roundtable to an economic seminar in Colorado (Trotter 2000a: p.17).
Some commentators have suggested that in terms of organised social forces backing the Labour Party, Maori and Pacific Island groups remain important. Yet the fabled Ratana Church link has ceased being anything more than a myth for some time. In fact by the 1990s, Labour’s Maori MPs themselves had only tenuous political links with Maori through their organisations – apart from with the leaders of those groups. However, some of these Labour-Maori links have been partially renewed – especially the tribal relationships, and many of the Maori MPs owe their success to the backing of various iwi. For example, MP Nanaia Mahuta won the Te Tai Hauauru electorate with the family/corporate backing of Tainui amongst others (Taonui, 1999: p.A17).
The general weakness of all these traditional links has encouraged the creation of relationships with more modern and party-manufactered organisations. The best example within the Labour Party of a manufactured type aligned group was the Mike Moore Supporters Club (MMSC), which Moore established as a powerbase for his unstable leadership position between 1990 and 1993. Following the party’s 1990 defeat Moore had few parliamentary allies, and the Labour Party extra-parliamentary organisation was largely aligned against him. In November 1992 Moore and his allies subsequently took over a limited liability shelf company, named Teamcorp Securities, renaming it MMSC Ltd in January 1993 (Stephen Harris, 1993f: p.2). The leading figures and directors of the MMSC – Clayton Cosgrove, Barry Ebert and Murray Wansbrough – were all employees in Moore’s own parliamentary office. It is not known how many actual members the MMSC had, but it was not believed to be of any substantial size. The organisation had every appearance of being a cadre type group that involved only a cabal of Moore loyalists, rather than a community based semi-mass organisation. The organisation was involved in elite-type activities rather than working at a electorate level. For example in 1992, the MMSC held a conference on developing a vision for social progress, on behalf of the Labour Party, which was attended by a range of leading intellectuals. The MMSC then published a book and a video of the proceedings. Other material published included Moore’s own best-seller, Fighting for New Zealand, and the Labour Party’s 1993 election manifesto (Moore, 24 Sep 1994). According to Small, the MMSC ‘controlled most of the funding, and hence the content, of election material’ (Small, 1993b). In election year the club also attempted to organise and control important party canvassing data. The MMSC signed a contract with the Labour Party organisation to process the canvassing results from electorates. To create a database of the canvassing information, the MMSC utilised the computer company Cardinal Network, which was owned by a friend of Moore’s (Harris, 1993f: p.2). The MMSC subsequently sublet campaigning information back to the individual Labour Party electorate organisations. The party also acted as a conduit for raising party funds that could be controlled by Moore.
The creation and operation of the Mike Moore Supporters’ Club exacerbated the fractious situation in the party, especially after Moore attempted to affiliate the club to the party organisation. Had this move been successful, it would have given the MMSC a similar status to the affiliated trade unions, whereby according to Vernon Small, ‘every branch in the country could have MMSC members. The voting power could have been immense, and would have been crucial to the selection process under MMP’ (Small, 1993b). The Labour Party Council ‘fearing the creation of a "party within a party" along the lines of the Militant Tendency in the UK or the indigenous Backbone Club, vetoed his proposal’ (Sheppard, Jan 1998a: p.216). Similarly, the right-wing Backbone Club emerged within the Labour Party during the late 1980s to foster the economic reforms that the Government was carrying out, but was more of an organisational and politicking body than an intellectual one [See: Sheppard (1999: pp.113-116; p.211), Jesson (1989a), McLoughlin (1990b), and Hine (1995)]. Some in the party worried that the Backbone Club was becoming ‘a party within a party’ – an idea borne out by the fact that eventually many of its members went on to form the Act party. Later the Labour Party president announced that ‘the club was a "proscribed", or banned, organisation following a decision by the party’s ruling council’ (Munro, 1990). The Backbone Club later spawned another ginger group, Vision 20/20, which ultimately evolved into Act. Likewise, Jim Anderton’s Economic Policy Network within Labour served as an organising vehicle for many of those who eventually set up the rival NewLabour Party.
Since the 1980s there have also been a number of think tanks associated with Labour. The Gamma Foundation was established in the early 1990s to help foster a reformulation of social democracy. This involved a number of academics led by Pat Walsh, a lecturer in industrial relations, as well as trade union leaders such as the CTU’s then economist Peter Harris. The Foundation released discussion papers on the economy and organised two conferences on ‘reshaping social democracy’ (James, 1993k: p.78). In 1999 the Gamma Foundation joined together with unions to sponsor a book entitled The New Politics: A Third Way for New Zealand. In 1999 the Foundation for Policy Initiatives (FPI) was set up as a think tank in alignment with the Labour Party. According to its leaders, the FPI was dedicated to generating ‘progressive new ideas that will invigorate public policy debate and political thinking’ (quoted in Trotter, 1999e: p.17). Like the Gamma Foundation, the FPI sought to ‘modernise’ social democracy – in particular focusing on the Third Way concepts of ‘industry development’ and the ‘active, enabling state’. At the same time that the FPI was started, the Bruce Jesson Foundation was also launched, with the involvement of Noam Chomsky as patron, and David Lange as chairperson, as well as Jane Kelsey and a number of other left-wing academics and political activists. Formed in remembrance of political journalist and left-wing activist Bruce Jesson, the Jesson Foundation is not closely aligned to any one party, but was seen to attempt to bring the Labour Party and the Alliance closer together.
In the 1990s the Labour Party developed various new formal and informal links with other organisations. These included the anti-smoking lobby group ASH, and the now-defunct Coalition for Public Health. Another sector group that has been closely linked to Labour in the past is the New Zealand University Students Association (NZUSA), and it has been common for leaders of NZUSA to eventually go onto political careers with the party. Nowadays Labour is said to work closely with a number of other more right-wing interest groups, such as the Trade Liberalisation Network (Kelsey, 2002: p.42).
